Chapter 3.2.3. Entrants
Entering the banking business will take high capital injections, as well as brand building along with industry know-how. In the matured markets we hardly see any new banks arising. On the contrary, we can observe huge consolidations going on. Thus big financial institutions experience little, if any, risk from up-and-coming banks.
The real threat can come from big players using its power along with new technologies to conquer new markets. Competing on technology basis allows providing better and less expensive services. E.g., ING bank stroke with completely unbeatable Internet saving accounts. This had forced the major player to respond with raising the interest rates and providing the similar products for the existing customers in order to prevent their defection.